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MORTGAGE AND REALTY TRUST RELEASES ANNOUNCEMENT

 MORTGAGE AND REALTY TRUST RELEASES ANNOUNCEMENT
 ELKINS PARK, Pa., June 15 /PRNewswire/ -- Mortgage and Realty Trust


(MRT) today commenced a solicitation for acceptances from holders of MRT's outstanding Creditor Obligations issued pursuant to a plan or reorganization confirmed in February 1991 in MRT's bankruptcy case.
 The current outstanding principal balance of the Creditor Obligations is approximately $329 million.
 A committee of MRT's creditors has been actively participating with MRT in negotiating a restructuring of the terms of the Creditor Obligations, which comprise all of the outstanding commercial non-trade debt of MRT. Pursuant to the solicitation, MRT is seeking to modify the Creditor Obligations to provide for holders of Creditor Obligations to receive modified securities in a principal amount equal to the outstanding principal amount of the Creditor Obligations. The modified securities will mature on June 30, 1995, with certain deferred payments payable no later than Dec. 31, 1995. The modified securities will be issued under an indenture naming Wilmington Trust Company as indenture trustee and will be secured by liens on all of MRT's assets. Specifically, the proposed adjustments to the terms of the Creditor Obligations include: (i) additional deferrals of the scheduled principal amortization during a temporary period; (ii) a temporary 9 percent pay cap on the contractual interest rate; if utilized, any interest deferred would be paid at Dec. 31, 1995; (iii) a plan to require MRT to reduce non-performing assets or incur penalty fees; (iv) corresponding covenant adjustments; and (v) a change in the approval mechanism to allow for third-party financings where the proceeds are used to repay creditor obligations.
 Under the terms of the MRT solicitation, the modifications will be effectuated either through an amendment to MRT's existing plan of reorganization or through the adoption of a pre-packaged plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code. MRT is soliciting acceptances from holders of Creditor Obligations to the restructuring. The solicitation of acceptances to the restructuring will remain open for 20 business days, subject to extension at the option of MRT.
 Payment of approximately $37.8 million in principal and approximately $6.6 million in interest will be due on MRT's existing Creditor Obligations on June 30, 1992. As a result of MRT's financial condition and the current condition of U.S. real estate markets, MRT said it does not expect to be able to make the schedule principal payment on June 30, 1992. In any event, MRT said it anticipates that it will not make the scheduled principal payment because the due date for the acceptances being solicited for the restructuring falls after June 30, 1992. Failure to make such payment would constitute an event of default under MRT's Creditor Obligations and would entitle the holders to exercise foreclosure and other remedies.
 The restructuring is an integral part of MRT's overall undertaking to improve its financial and operating performance. The goal of this effort is to more properly match debt amortization and associated interest expense with cash flows, thereby reducing the pressure to liquidate assets merely to service MRT's debt. MRT's trustees said they hope, in this way, to maximize the long-term value of MRT's assets and MRT's shareholder value and to maintain MRT's viability in the current real estate market.
 Because MRT will need acceptances from all holders of Creditor Obligations to implement the restructuring outside of bankruptcy proceedings, there can be no assurance MRT will be able to do so. Any reorganization pursuant to Chapter 11 will involve risks and costs beyond the control of MRT.
 MRT is a self-administered real estate investment trust organized under the laws of the state of Maryland. MRT presently has invested assets of approximately $470 million which includes 64 mortgage loans and 42 investments in real estate equities located throughout the United States.
 /delval/
 -0- 6/15/92
 /CONTACT: Daniel F. Hennessey, treasurer of Mortgage and Realty Trust, 215-881-1525/
 (MRT) CO: Mortgage and Realty Trust ST: Pennsylvania IN: FIN SU: RCN


CC-JS -- PH032 -- 0351 06/15/92 17:11 EDT
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Publication:PR Newswire
Date:Jun 15, 1992
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